Auditing the Audit

There’s no denying the recommendations of the Commission of Audit were shocking. There are several competing theories as to why they were so shocking. Some suggest it’s an insight into what the government would really like to do if they think they can get away with it. Others suggest it’s all a red herring to make a horror budget look mild in comparison. My in-between theory is that they might be testing the waters to see what prompts the most murderous outrage and what they might be able to sneak in while everyone is murderously outraged about the other stuff. Does anyone remember WorkChoices?

There is merit in each theory but what I found particularly shocking was the evident lack of thought that has gone into some of the recommendations. For example: privatising the Royal Australian Mint. This would mean it would be in someone’s commercial interests to print more money. What could possibly go wrong?

It’s the wilful ignorance expressed in explaining some of the recommendations that really staggers me though. In suggesting a $15 co-payment for a GP consultation (150% more than the already mooted $6), commission chairman Tony Shepherd said, “Something that’s free is not valued.” While he may be correct in the abstract, the simple fact is that it’s not free. We pay for it. Not only do we pay for it, we pay for it in advance through the Medicare levy, whether we use it or not. So the problem is not in users not valuing something that’s “free,” it’s in auditors not valuing something that taxpayers have already paid for.

The commission figured out that Australians visit their GP an average of 11 times a year and Mr Shepherd observed that, “I just don’t think Australians are that crook,” without so much as an “I’m not a doctor but…” This comment betrays not just a crass arrogance but a clear ignorance of why the health system is there. Health care is not just about dealing with the chronically ill but also early intervention to prevent chronic illness, which avoids both suffering and further expenses.

Mr Shepherd may be correct that a $15 co-payment will give people pause to wonder if they should really see a doctor or not but that pause could be fatal. For example, angina pain can often feel like indigestion. Far too many people suffer heart attacks because they dismiss the warning signs as indigestion or muscular pain, and that’s without a co-payment. Slapping on a fee which some people will not be able to afford is only going to make them more likely to tell themselves it’s probably just indigestion which will pass in a few hours and people will die. If I were a cynic, I might suspect the commission wouldn’t mind that because it would mean we save on pension payments too. Oh, that reminds me… I am a cynic.

Then, when asked how the commission arrived at the figure of $15, Mr Shepherd said, “We just thought that they were reasonable payments and well within the reach of the people that were asked to pay them.”

In other words, the commission pulled the figure out of its arse. Its recommendations are thought bubbles from people living in a bubble.

Because this is a citizen commentary ’blog (I am not a journalist of any description), I’ve neither the time nor inclination to drill down into Tony Shepherd’s history or qualifications. I don’t mind admitting I’d never heard of him this time last week. However, his statements this week make him sound like a well-dressed version of that nutter on the bus who keeps banging on about dole bludgers, the price of bananas and how kids these days don’t know what proper music is.

I have a lot of sympathy with the argument that the report and the timing of its release are all about softening the blow of the actual budget but I also agree that the extremism of these proposals needs to be protested long and loud.

There is reason for optimism, though.

Even if this report represents the actual secret desires of the government and are adopted as policy, this government will not be there forever. If the most extreme and dangerous recommendations ever do become legislation, they will simply be at the top of the list for repeal by the next government, whoever they may be. These are long term, idealistic recommendations. From the Sydney Opera House to the NBN, history teaches us that if a scheme is going to take longer than two parliamentary terms to come to fruition, you might as well forget about it ever happening in its original intended form. We have a well-established pattern that the first act of any new government is to tear down or stuff up what the previous government has set in place.

It’s this tradition of short attention spans and lack of long-term vision that may save us.

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14 thoughts on “Auditing the Audit”

The aspect that makes me loathe this bloke most is the total ignore of anything to do with tax. I reckon that’s the dead giveaway that this C of A was primed in how it was to report: Mr Rabbit said “For god’s sake don’t mention the war !” – no, sorry; it was “don’t mention any tax !”.

Why is getting back into surplus the sole aim of this government, what happened to a fair, honest and just society, Menzies was quite content to have managed deficits for all of his time in government.

And there was the matter of paying off World War 2.
There’s a time and a place for both. Many conservative thinkers overseas consider a surplus to be a sign that you’re taxing too much, which makes the Australian conservative obsession with surpluses a little out-of-step.

I’m no Keating fanboy, but it was Keating who made surpluses the norm, or at least a realistic objective and that was also the last time that Labor really set the agenda.

It’s well known that Mr Abbott had to refinance his mortgage when he lost his ministerial salary in 2007. In other words, he increased or extended his deficit. It worked out for him.

The thought that came to my mind when I read the recommendation by the BCA COA to sell the Australian Mint was, “Note Printing Australia. Hmm. Now there was a successful venture at letting a profit motive be married to the province of the Reserve Bank. Not”

There are figures on GP visits a year. They are on line. They show less than half the number of GP visits a head that Shepherd repeatedly asserted yesterday. (The figures break down into several different types of region. None is more than half Shepherd’s strong statement.)

We know that cash payments stop the people who most need to go to the GP: the poor, the old and the chronically ill. We know this costs the health system because treating people late, when they are sicker, is more urgent and more pricey.

But Shepherd and the agitprop committee went with a figure they liked, drawn from nowhere: just like the figure for the level of ‘co’ payment.

Could you please provide a link? I’m very interested in the numbers. If he got the numbers wrong, it’s not only embarrassing him It challenges the credibility of a government that chooses people of such calibre to do an audit.

Wasn’t there an economist who said there were three classes in a capitalist society – the capitalists, the managers, and the proletariat?

The capitalists try to protect the managers, but with the proles so angry, the talk of additional taxes for those on high income is pulling the managers in, hoping that that will satisfy the proles.

Income tax, of course, catches only the proles and the managers. Income tax is supposed to be progressive, but it stops progressing at middle-manager salaries. And capitalists increase their wealth in ways that are not classed as personal, taxable income.

Capitalists don’t like free markets, which require hard work and high risk to be profitable – they much prefer rent-seeking enterprises. And the carbon tax and the mining tax, which the government killed, are taxes on rents.